The World Bank, Federal Ministry of Finance and the Nigerian National Petroleum Corporation have commenced investigations to determine the actual volume of Premium Motor Spirit, popularly known as petrol, being consumed in the country.
According to the Chief Operating Officer, Downstream, NNPC, Henry Obih, the National Executive Council has directed the corporation to work with the finance ministry in determining the actual amount of the PMS consumed daily, adding that the oil firm was seeking the support of the World Bank to carry out the task.
This is coming as the corporation announced the attainment of a two-year record spike in gas supply to power generation plants, which hit 854.4 million standard cubic feet of gas per day for March 2018, translating to an equivalent power generation of 3,492 megawatts.
Speaking at the Nigerian Oil and Gas Conference and Exhibition in Abuja, Obih also stated that irrespective of the high cost of fuel imports, the country’s refineries were currently selling petrol at N103 per litre.
He said, “We (the NNPC) are presently in a joint project with the Federal Ministry of Finance. We are doing a study around consumption. It is to determine the actual consumption by the people.
“We have to put it on scale to see what we call the daily load or the evacuation, as against the actual consumption, that is, what people go to the pump every day to buy for their cars and generators at homes and for other uses.”
The exact volume of petrol consumed daily in the country has been controversial in the past few months, as this determines the amount being deducted by the NNPC from its revenue before it makes remittances to the Federation Account.
The corporation also claims to be making under-recovery due to the amount it spends in subsidising the PMS, a development that is faulted by state governors due to its negative impact on the Federation Account.
Obih, however, told guests at the conference that the truck out of the PMS from the depots had been on the increase since 2016, adding that this could be due to smuggling, as the cost of the commodity in Nigeria was very low when compared to in other West African countries.
He said, “In terms of what we truck out from the depots around the country every day in terms of what the PPPRA (Petroleum Products Pricing Regulatory Agency) and the DPR (Department of Petroleum Resources) report as numbers that we move by trucks and pipelines on a daily basis; in 2016, the numbers were 48 million litres a day. In 2017, it went up to 50 million litres a day. But again, that is daily load out, which is not consumption. Consumption is a fraction of that.
“This is why the National Economic Council has mandated that we work with the Federal Ministry of Finance. We had a meeting with the World Bank about six weeks ago, and we are trying to progress on a global study that will help us to get around the actual numbers of what we consume in Nigeria.”
He added, “But again, one significant challenge is the fact that we have cross-border smuggling. Nigeria remains the cheapest source of PMS in the West African sub-region. All our neighbouring countries are selling at over 200 per cent of the price that we pay at the pump.
“If you go to Niger and Cameroun, then it is in the 400 per cent region. For the rest of the countries, it is about N360 to N370 as against the N145 per litre that we sell. That is sufficient incentive for those who want to take the product across the border to sell and make a good margin.”
He stated that going by the wide disparity in the prices of petrol in West Africa, “if we do a complete study today that is focused on actually tracking the sub-groups that Nigeria buy fuel from, we would still have a margin of error that is significant. This is because the volume that leaves Nigeria through the borders cannot be reported in accuracy today.”
Obih, however, stated that the NNPC was working closely with the Nigeria Customs Service, Department of State Service and other security agencies, and that things had improved significantly.
On pipelines, he lamented that there was a mafia living and feeding on a critical segment of the country’s pipeline network.
“We have challenges in the pipelines that run through land, specifically, the System 2B, for instance, which is the one that runs around Lagos. It remains a big challenge because there is a mafia that lives and feeds on those pipelines,” he added.
On gas supply for power generation, the oil firm stated that this attained a two-year record spike in March this year, adding that a total national gas production of 253.06 billion cubic feet, averaging 8,163.58mmscfd was achieved.
A breakdown of natural gas off-take, commercialisation and utilisation showed that out of the volume of gas supplied in March 2018, a total of 152.60bcf was commercialised, comprising 40.52bcf and 112.08bcf for the domestic and export markets, respectively.